A monopolist finds the price-output combination that maximizes its profits by
A) equating total revenue and total cost.
B) equating marginal revenue and marginal cost.
C) finding the combination for which the difference between marginal revenue and marginal cost is the greatest.
D) equating price and marginal cost.
Answer: B) equating marginal revenue and marginal cost.
You might also like to view...
Mike is a college student who works part time and earns $100 per week. He spends his entire income on two goods: pepperoni pizzas and bottles of soda. The price of a pepperoni pizza is $10 and the price of a bottle of soda is $2
What is the opportunity cost of a pepperoni pizza? What is the opportunity cost of a bottle of soda?
Stock markets deal
a. almost exclusively in newly issued stocks. b. in previously issued stocks. c. in both newly issued and previously issued stocks, but they do not deal in bonds. d. in large amounts of both newly issued and previously issued stocks and bonds.
Which statement about oligopolies is true?
A. Most oligopolies in the U.S. engage in outright collusion. B. Most oligopolies operate at the minimum point of their ATC curves. C. Most of our GDP is produced by oligopolies. D. Collusion is illegal in the U.S. and does not exist.
Under the U.S. system of regulation, most regulars are selected from
A) politicians and their friends. B) the industry that is to be regulated. C) consumer advocacy groups. D) university professors who understand the nature of the industry and who understand the true interests of consumers.